Latest news with #Lithia
Yahoo
25-07-2025
- Business
- Yahoo
3 Consumer Stocks We Approach with Caution
Retailers are overhauling their operations as technology redefines the shopping experience. But many seem to be moving too slowly as their demand is lagging, causing the industry to underperform the market - over the past six months, retail stocks have shed 5.8%. This performance is a noticeable divergence from the S&P 500's 5.8% return. A cautious approach is imperative when dabbling in these companies as many will light cash on fire by opening new locations without the proper justifications. Keeping that in mind, here are three consumer stocks we're passing on. Lithia (LAD) Market Cap: $8.06 billion With a strong presence in the Western US, Lithia Motors (NYSE:LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers. Why Do We Think Twice About LAD? Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand Widely-available products (and therefore stiff competition) result in an inferior gross margin of 15.9% that must be offset through higher volumes High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens Lithia is trading at $309.78 per share, or 8.7x forward P/E. Dive into our free research report to see why there are better opportunities than LAD. Petco (WOOF) Market Cap: $1.06 billion Historically known for its window displays of pets for sale or adoption, Petco (NASDAQ:WOOF) is a specialty retailer of pet food and supplies as well as a provider of services such as wellness checks and grooming. Why Are We Out on WOOF? Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations Earnings per share have dipped by 41% annually over the past four years, which is concerning because stock prices follow EPS over the long term 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings Petco's stock price of $3.89 implies a valuation ratio of 27.4x forward P/E. If you're considering WOOF for your portfolio, see our FREE research report to learn more. Walgreens (WBA) Market Cap: $10.03 billion Primarily offering prescription medicine, health, and beauty products, Walgreens Boots Alliance (NASDAQ:WBA) is a pharmacy chain formed through the 2014 major merger of American company Walgreens and European company Alliance Boots. Why Are We Hesitant About WBA? Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 3.8% over the last six years was below our standards for the consumer retail sector Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 17.7% High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate At $11.58 per share, Walgreens trades at 7.9x forward P/E. Check out our free in-depth research report to learn more about why WBA doesn't pass our bar. Stocks We Like More Donald Trump's April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities. The smart money is already positioning for the next leg up. Don't miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-07-2025
- Automotive
- Yahoo
Will Strategic Use of ADESA Infrastructure Support Carvana's Goal?
Carvana Co. CVNA is striving to improve in every aspect of its business. It is vigilant about where it earns money and where it spends it. It has an ambitious goal of selling 3 million cars a year and achieving 13.5% adjusted EBITDA margins within the next 5 to 10 years. To achieve this goal, it has been increasing the number of cars it can get ready for sale quickly. Over the past year, it has been working out of about 23 locations on average. In the future, it expects to grow that number to around 60 locations, as the addition of more locations makes it easier to scale up May 2022, CVNA bought ADESA to expand its market presence. The acquisition came with a lot of valuable infrastructure. Since then, Carvana has been steadily opening mega sites that can handle both auction capabilities and reconditioning addition, the company already owns inspection centers that are not being used to their full potential. So instead of needing to build everything from scratch, Carvana can grow by making better use of the facilities it already has. Of course, this growth will still require some spending, but overall, compared to other companies with similar opportunities, Carvana believes it's in a great position to grow efficiently. CVNA carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks CVNA expects to improve its margin, other auto retailers like Lithia Motors, Inc. LAD and AutoNation, Inc. AN struggle to maintain healthy reported an adjusted EBITDA margin of 4.4% in the first quarter of 2025 compared to 4% in the year-ago period. High tariffs could cause automakers and parts suppliers to raise prices, forcing Lithia to pass those higher costs on to customers. More expensive vehicles could discourage buyers, leading to lower sales volumes. To stay competitive, Lithia might need to offer discounts or incentives, which would pressure profit margins. AutoNation had been operating below 60% selling, general and administrative (SG&A) as a percentage of gross profit in 2021 and 2022. However, in 2023 and 2024, its SG&A as a percentage of gross profit increased to 63.4% and 66.6%, respectively. The company's degrading operational efficiency is worrisome. Adjusted SG&A was 67.5% of gross profit in the first quarter. The company expects SG&A as a percentage of gross profit in the band of 66-67% for the full year, which is likely to take a hit on its margin. Carvana's Price Performance, Valuation and Estimates Carvana has outperformed the Zacks Internet-Commerce industry year to date. CVNA shares have surged 70.9% compared with the industry's growth of 9.5%. YTD Price Performance Image Source: Zacks Investment Research From a valuation perspective, Carvana appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.61, higher than its industry's 2.17. Image Source: Zacks Investment Research EPS Estimates Revision The Zacks Consensus Estimate for 2025 and 2026 EPS has moved down 7 cents and 5 cents, respectively, in the past 30 days. Image Source: Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AutoNation, Inc. (AN) : Free Stock Analysis Report Lithia Motors, Inc. (LAD) : Free Stock Analysis Report Carvana Co. (CVNA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
20-06-2025
- Automotive
- Yahoo
Will Carvana Extend Its Streak of Record Retail Sales in Q2?
Carvana Co. CVNA reported retail unit sales of 133,898 in the first quarter of 2025, which increased 46% year over year and set a new record. This growth reflects the company's evolving customer offering, growing consumer awareness and trust and the operational advantages of scale, including increasing inventory selection. The significant rise in retail unit sales contributed to record quarterly revenues of $4.23 billion, up 38% year over year. The reciprocal tariffs imposed by the Trump administration on imports could affect the cost of vehicles. However, Carvana expects that these higher tariffs are more likely to inflate prices of new vehicles relative to used ones, which could create a favorable pricing environment for the used vehicle market. Such conditions may particularly benefit business models focused on delivering strong consumer value, in which CVNA sees itself macroeconomic conditions remain steady, the company anticipates a sequential rise in retail unit sales in the second quarter, which could result in another all-time high. After delivering four consecutive quarters of retail unit growth exceeding 30%, the company has outlined a new long-term management goal. It plans to scale retail unit sales to 3 million annually within the next five to ten years. CVNA carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks competitors, like Lithia Motors, Inc. LAD and Group 1 Automotive, Inc. GPI, have also registered growth in retail unit sales in the latest reported quarter and are expanding their geographical footprints to support further the first quarter of 2025, Lithia's retail new and used vehicle sales reached 91,990 and 107,326 units, respectively, suggesting a year-over-year rise of 7.4% and 4.8%, respectively. Strategic acquisitions and store expansions are boosting Lithia's sales. The company is focused on buying large, high-performing stores in the Southeast and South-Central United States. By also expanding its digital reach, Lithia aims to grow its U.S. market share to 5%, up from just over 1% 1's retail new and used vehicle sales totaled 56,099 and 59,618 units in the first quarter of 2025, marking an improvement of 26.6% and 21.2% year over year, respectively. Acquisitions of dealerships and franchises are boosting Group 1's sales. In May, Group 1 acquired a Lexus and an Acura dealership in Florida and a Mercedes-Benz dealership in Texas to support growth in its key cluster markets. Carvana has outperformed the Zacks Internet – Commerce industry year to date. CVNA shares have gained 51.4% compared with the industry's growth of 4.2%. Image Source: Zacks Investment Research From a valuation perspective, Carvana appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.28, higher than its industry's 1.98. Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2025 and 2026 EPS has moved up 9 cents and down 13 cents, respectively, in the past seven days. Image Source: Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report Lithia Motors, Inc. (LAD) : Free Stock Analysis Report Carvana Co. (CVNA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Scottish Sun
19-06-2025
- Automotive
- Scottish Sun
Family-run car dealership group founded over 100 years ago set to be taken over by US giant in just weeks
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A CENTURY-old car dealership group could soon be taken over by a major US company, according to reports. Family-run group Hatfields is rumoured to be on the cusp of being acquired by the American giant Lithia, Car Dealer Magazine has reported. Sign up for Scottish Sun newsletter Sign up 1 Hatfields was founded by Ernest Hatfield in 1922 Credit: Google maps Sources close to the group told the magazine that staff had been informed of the deal via email. Insiders have told the outlet that the email tells employees that it will be made official on August 1. Lithia did not respond to Car Dealer Magazine's requests for comment. Hatfields boss Gareth Williams told Car Dealer: "We have no comment to make at this moment in time." Another senior source told Car Dealer: "I have been told locally by many staff working at Hatfields branches that the business has been bought out by Lithia. "All staff at Hatfields had an email On Wednesday 4 June at 7:30am. "The takeover will be complete on August 1." Hatfields was founded by Ernest Hatfield in 1922, and was named Jaguar's Partner of the Year in 2022. It operates dealerships that represent Jaguar, Land Rover and others throughout the Midlands and North West. Hatfields would join others like Evans Halshaw, Stratstone and Jardine Motors under Lithia's wings if the rumours prove to be true. Chilling moment thieves steal car with wireless device in seconds as new doc reveals how Brit motors end up in Lithuania The Sun has also approached Lithia for comment. It comes after three major UK car dealerships are set to close in just days as a US giant makes "drastic cutbacks". In March, The Sun reported that Group 1 Automotive would shut three Volkswagen Group sites. The affected sites were Audi Approved Hyde, and Volkswagen Wirral and Cheltenham. A spokesman for Group 1 Automotive told Car Dealer: "Due to the ongoing challenges presented by the current economic climate, we are unfortunately having to take some difficult decisions, which include the closure of our VW Wirral and Cheltenham stores, and Audi Approved Hyde."
The Irish Sun
19-06-2025
- Automotive
- The Irish Sun
Family-run car dealership group founded over 100 years ago set to be taken over by US giant in just weeks
A CENTURY-old car dealership group could soon be taken over by a major US company, according to reports. Family-run group Hatfields is rumoured to be on the cusp of being 1 Hatfields was founded by Ernest Hatfield in 1922 Credit: Google maps Sources close to the group Insiders have told the outlet that the Lithia did not respond to Hatfields boss Gareth Williams told Car Dealer: "We have no comment to make at this moment in time." read more in motors Another "All staff at Hatfields had an email On Wednesday 4 June at 7:30am. "The takeover will be complete on August 1." Hatfields was founded by Ernest Hatfield in 1922, and was named Jaguar's Partner of the Year in 2022. Most read in Motors It operates dealerships that represent Jaguar, Land Rover and others throughout the Midlands and Hatfields would join others like Evans Halshaw, Stratstone and Jardine Motors under Lithia's wings if the rumours prove to be true. Chilling moment thieves steal car with wireless device in seconds as new doc reveals how Brit motors end up in Lithuania The Sun has also approached Lithia for comment. It comes after three major UK car dealerships are set to close in just days as a US giant makes "drastic cutbacks". In March, The Sun reported that Group 1 Automotive would shut three Volkswagen Group sites. The affected sites were Audi Approved Hyde, and Volkswagen Wirral and Cheltenham. A spokesman for Group 1 Automotive told Car Dealer: "Due to the ongoing challenges presented by the current economic climate, we are unfortunately having to take some difficult decisions, which include the closure of our VW Wirral and Cheltenham stores, and Audi Approved Hyde."
